Long journey ahead for mobile payment systems
Three of the top wireless carriers in the country and the companies backing BlackBerry and Android smart phones gave NFC or near field communications technology to be used for mobile payments a shot in the arm by announcing collaboration in order to build a mobile network in the coming 18 months. This joint venture would be known as ISIS. The three wireless carriers in focus are AT & T, Verizon and T-Mobile which will work with Discover Financial Services, the 4th largest credit card payment processing system. They would also work with Barclaycard US, which is a unit of Barclays Plc that is going to issue these credit cards. These 3 wireless carriers put together account for 200 million subscriber base.
NFC wireless networking would be used by ISIS to let the users make payments from their mobile phones which will be equipped with NFC. This way, payments can be made by waving phones 3 or 4 inches over the payment device. NFC, which was announced in 2004, has been widely used in Korea and Japan but it will take some times before consumers will start making payments with their smart phones or other wireless devices at groceries, subway rides or big expenses.
It will be a long time before this technology can be expected in the mainstream. It is expected though that within a decade there will be a considerable number of users who would have adopted this form of payment. However, it might take more than a decade before customers will start paying for items more than 25 dollars with their wireless phones and credit cards would be preferred for bigger expenses until then.
Unlike in most places where a mobile phone is indeed used as a payment option, in US consumers have a lot of modes to make payments. This includes a few types of credit cards which might pull away he customers from accepting another additional payment method. The acceptance from the users could prove to be the biggest challenge for the mobile payment method. Customers, according to analysts might not trust the mobile companies, having been stuck with the credit cards for quite some time. It is hard to believe that companies like Google or Apple or the mobile companies are hard to be imagined as credit card lenders. Interestingly the reputation of the carriers compared to that of the banks is not good either and customers might be sceptical.
